I've been an entrepreneur for as long as I can remember. As a kid, I started selling cool rocks even before I sold lemonade. At age 8, I hired my two friends to deliver newspapers and gave them 75 cents a day, and I kept 25 cents. I've gone on to start much larger companies, divisions within companies, both within the US and outside, that have led to both success and failure. Venture backed, partnerships, bootstrapped, high growth, retail, commercial real estate, technology, energy, B2B, B2C, B20 - nobody is there to buy) and more. I’ve learned my greatest life and business lessons from my failures. I recently completed a book for Wiley & Sons, entitled The 7 Non Negotiables of Winning: Tying Soft Traits to Hard Results, which you can read about here: http://www.7nns.com. My current company, Fishbowl, is a culmination of everything I’ve learned over my 30-plus business years.

Why CEOs Should Care: How Social Media Drives Business

Have you heard the expression TMI (Too Much Information)? We’ve all known individuals who share far too much.

Companies whose leaders engage in social media are further ahead

But for a business? Here’s an area where entrepreneurs – and employees – may be miles ahead of the boss. The data is in, and it’s extremely compelling: For businesses, the willingness to share and engage through social media—and especially, the willingness of top management to engage–is a definite plus.

Several news reports show that social media is vital for business, and its role is only increasing.

Yet among Fortune 500 CEOs, Josh notes, only 7.6 percent are present on Facebook, only 4 percent use Twitter, and less than 1 percent use GoogleGoogle Plus. LinkedInLinkedIn is the only social network where CEOs are slightly ahead of the general populace, the report says: Twenty-six percent of CEOs surveyed use LinkedIn, compared to 20.15% of the population at large.

Forbes’ Mike Fidelman noted this phenomenon as well: When IBM (NYSE: IBM) recently surveyed 1,709 CEOs around the world, they found only 16% currently participating in social media–but they predict the percentage will likely grow to 57% within 5 years.

Why? CEOs—and especially large company CEOs–are finally realizing what progressive companies and their customers already know–that using social technologies to engage with customers, suppliers and even their own employees enables organizations to be more adaptive and agile.

This is a principle we take to heart at our own company, Fishbowl. With my paired leadership partner, Mary Michelle Scott, we try to operate like an open book.

We maintain a Facebook group for our inventory control customers where they can interface directly with our engineers. Our customers are free to send praise, complaints, ideas and requests for new features in a forum the entire world can see. We also make it a practice to share our competitors’ information freely and to praise their successes as well as our own. It takes courage to share not only the good news but also the experiences for learning, which are not always pleasant.

It is interesting to note that some companies who are “cut-throat competitive” will generally fare poorly in social media, but it’s an area where companies who are collaborative and cooperative can thrive and grow their businesses.

In many respects, social media is the “universal university” for us all. We can teach and learn from one another. We can also improve from others, through comments, feedback and spirited dialogues, even in the situations where we may not agree.

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This is a fantastic article! I love the statistics at the end. I strongly feel that unless you are active in using these great social media tools today, your business will be hidden and much less credible. Also, I loved what you mention, “using social technologies to engage with customers”. There is no substitute for social media when engaging with customers. It allows you to do so on a more personal level. When these personal relationships are made, it is much easier to retain our hard-won customers.

If your business doesn’t have a page on facebook, don’t wait another day! You never know what benefits you are missing out on.

“We also make it a practice to share our competitors’ information freely and to praise their successes as well as our own. ”

It is wonderful that Fishbowl is not afraid to praise their competitors success as well as their own. This shows a real, genuine desire to solve the problem at hand (helping other businesses grow and thrive through inventory management), and not just to be the “ top dawg.” I love working at Fishbowl because even though we strive to be the best at our game, it is a personal best, and it does not come at the cost of other individuals.

I strongly agree with your thoughts, leaders today should be engaged in social media. Your examples clearly showed the effectiveness of using social media to manage companies both internally and externally. To add to that, 82% of the world’s online population is reached by social networking sites (Source: comScore). With this statistic in mind, if business leaders learn how to use social media to their advantage they could influence a greater number of consumers and consequently have a high ROI. It is imperative that CEOs start exploring social media and keep up with this constantly evolving world.

Another aspect of engaging in Social Media that I think your employees benefit from is “What is my CEO/President thinking about? What are they interested in that I should be on top of?” I have no doubt that Fishbowl employees have learned a lot from your sharing on Twitter, blogging, etc. that they wouldn’t have otherwise.

At Josh James’ company, Domo, under the name plate on each cubicle is a second name plate with their Twitter handle. This is a great way to allow further connection within the company and reinforce the concept that every employee, and executive, can be a brand ambassador.

Peter, I love that concept. What a great idea. Like we always tell companies – your story is likely far too big to tell by yourself. Why not let your whole team get involved? Thanks for sharing that note.

Pretty cool idea at Domo. At Fishbowl, we probably will never get to the required place of social media, but rather to ebb and flow and allow the waters of the masses to impact the rest or for those who resist it will be just a matter of time. How many finally got a cell phone…our infrastructure and lifestyles require it. The same will be true with this form of communication…all will participate to some degree some day.

Your observations and conclusions are spot-on. In May of 2011 I authored an article for CEO Magazine making this same case: http://chiefexecutive.net/should-ceos-use-social-media

CEOs who continue to ignore social media are not only hurting themselves, they are hurting their brand, their culture and the shareholders as well. CEOs who don’t engage on social media platforms are simply not leading.